Creagan, Kona Coffee farmers pushed expanded product regulation

The KCFA also has its collective eye on several other ready-to-drink coffee companies, which like KonaRed are selling products in Hawaii that purport connections to the Kona coffee brand on their labels without specifying the extent.

For more than 15 years, roasted coffee and instant coffee companies marketing themselves in association with the Kona brand, or other brands connected to geographical regions in Hawaii, have been prohibited from doing so unless they can prove their products contain at least 10 percent of the coffee specific to that region.

In those cases, the producers are allowed to use labels like “Kona Blend,” for example, accompanied by the percentage of Kona coffee used in the products.

However, state legislation that created the labeling regulations doesn’t include canned or bottled ready-to-drink (RTD) coffee products, which are typically sold in bulk or off the shelf in coffee shops and retail stores. Rep. Richard Creagan, who represents South Kona and portions of both North Kona and Ka‘u, introduced House Bill 1757, along with 18 co-sponsors, to bring RTD products under the same regulations.

Creagan said this week the bill is about principal and local coffee growers maintaining control of brand integrity on which their profit margins rely.

“The big guys want to have the cache of having the Kona name on something and we don’t know how much Kona coffee is in them or, frankly, if there is any Kona coffee (in them),” he said. “It’s more of a matter of being consistent and persistent. … It’s easier for people to change their model early on than when they’re selling $100 million of this stuff.”

KCFA board member and former president Bruce Corker said the original legislation didn’t include RTDs because they weren’t pervasive at the time it was passed.

Bringing RTDs under labeling guidelines now, Creagan said, would simplify the process of enforcing proposed laws in separate legislation he hopes to see passed. Those laws would raise the amount of Kona coffee necessary for a product to claim itself a “Kona Blend” from 10 percent to 51 percent.

Creagan introduced House Bill 256 in 2017 pushing that agenda, which has been carried over to the 2018 session.

As for HB1757, dealing specifically with RTD labeling, it passed its first reading on Jan. 17. The House Agriculture Committee, on which Creagan sits, recommended Wednesday it be passed with amendments. The bill will move next to the Consumer Protection and Commerce Committee and if it passes, on to the Finance Committee.

But the bill may face a tough road, as the Hawaii Department of Agriculture, which holds the trademark to Kona Coffee, expressed its opposition to the measure in testimony offered Wednesday and attributed to Scott Enright, chairperson of the Hawaii Board of Agriculture.

“This bill expands the Department’s enforcement responsibilities to include the labeling and adverting of ready-to-drink coffee beverages at coffee shops,” the testimony read. “In addition, many ready-to-drink coffee beverages sold at retail are manufactured and packaged outside of Hawaii, in which the Department has no enforcement jurisdiction.”

The testimony also noted HDOA’s inability to determine coffee’s content or origin, or its precise blend, after it has been roasted.

Corker described the HDOA’s notion that its hands are tied when it comes to regulating out-of-state manufacturers as “nonsense.”

He referenced the Idaho Potato Commission, which he said protects that state’s potato farmers by issuing cease and desist orders and filing litigation in instances of trademark infringement, both within Idaho’s borders and without. He said similar agencies protect Napa and Sonoma grape growers in California and maple syrup producers in Vermont, among several others.

Sandra Scarr, KCFA vice president, said HDOA support is crucial for Kona coffee farmers, as her organization’s scope and reach are both limited.

“It’s just these coffee drinks have become so popular and there’s so many of them that it’s quite impossible for us as an organization to deal with the individual manufacturers,” she said.

While Corker said companies claiming associations with Kona coffee aren’t in direct competition with any local farmers as far as RTD market share is concerned, the lack of labeling regulations still creates a negative and meaningful economic impact felt across Hawaii Island and the state.

“If they’re using (the Kona brand) and not putting any Kona coffee in it, it reduces the demand for Kona coffee and reduces our income, reduces the price,” Corker said.

KonaRed — once based in Hawaii but now based in California, and which sells its products throughout the state — did not respond to multiple requests for comment.

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